Wall Street yesterday crawled its way deeper into the dark cave of a long bear market, as stocks sank here and abroad in a widening global slowdown.

The Dow Jones industrial average plunged more than 340 points as alarmed investors dumped shares and unwound numerous other bets, ranging from currencies to oil and other commodities.

Investors poured cash into the safety of US Treasuries as economists remained divided on what’s going to be the worst scenario ahead – lost jobs or more inflation.

Markets got spooked early over bad news on the employment front, with initial jobless claims rising to 444,000 versus an expected drop to 420,000, with the number of people counted as jobless rising to the highest level in nearly five years.

The news fed fears that today’s US employment data is going to be worse than expected.

The Dow fell 344.65 points, or 2.99 percent, to 11,188.23. The S&P’s 500 index lost 38.15, or 2.99 percent, to 1,236.83, and the Nasdaq composite index dropped 3.20 percent to 2,259.04, off 74.69 points.

All three indexes are in bear-market territory, defined as a 20-percent drop from their recent peaks.

The rush to buy Treasuries sent yields falling to four-month lows, threatening the fixed-income world. Government bonds in Europe also drew worried investors seeking shelter.

The moves sent the euro plunging to its lowest level against the dollar this year while pushing the dollar to stronger ground.

Oil and other commodities priced in dollars dropped. Oil demand also fell 3.5 percent in August said a government report. Crude fell $1.46 a barrel to $107.89.

To be sure, lower oil prices strengthen the dollar. But that could cut short America’s export boom. Exports have been credited with helping to stabilize the US economy during the credit crisis and housing recession.

“There are profound fears about a global slowdown and about the jobs number,” Haag Sherman, managing director of Salient Partners, said of yesterday’s unemployment data.